LONDON, Aug 5: The dollar regained its balance on Monday, proving resilient in the face of poor US data and losses on Wall Street last week as investors paused to reconsider the state of economies on both sides of the Atlantic.

The dollar, which came under pressure Friday from a host of poor economic numbers, was helped higher against the euro and the yen earlier on Monday as investors bought it back to cut back positions into the August holiday period.

Everybody’s waiting for this afternoon’s numbers out of the US after last week’s manufacturing ISM was disappointing, said Peter Fontaine, currency strategist at KBC in Brussels.

We’ll see if the services sector is also struggling. If that’s the case, you might get some losses in the dollar but overall it has weathered the storm pretty well.

The dollar was around a quarter of a per cent higher from late Friday, at $0.9835 per euro. It had slipped as low as $0.9918 on Friday.

The non-manufacturing index from the Institute of Supply and Management is forecast to fall to 54.6 in July from 57.2 in June when it is released on Monday.

Analysts are pushing out expectations for any hike in the US and even discussing the possibility the Federal Reserve might end up lowering rates by the time the year is out, speculation which could increase as the next policy meeting on August 13 approaches.

Investor attention will still be on US stocks, especially on more earnings results from US firms including technology giant Cisco Systems which is due to report its quarterly earnings this week.

Doubts about corporate accounting practices have not entirely disappeared with investors nervous about potential scandals later this month.

The Securities and Exchange Commission told the top 945 US publicly-traded companies in June that their chief executives and financial officers would have to certify the accuracy of financial books personally starting in mid August.

The euro zone economy will come under scrutiny this week with German unemployment and industrial output due as well as Italian second quarter gross domestic product.

There is a growing realisation the economic risks are becoming more balanced in the US and the euro zone. Data from the US are unambiguously weak and there are few encouraging signs, but stories from the euro zone are also bad, said Jake Moore, currency strategist at Barclays Capital.

The Reuters Eurozone Services and Composite Index showed services sector activity in the region expanded for the seventh month running, but at a slower pace, with a reading falling to 52.6 in July from 53.0 in June.

Soft euro zone data is limiting the upside for the euro but talk of a double-dip recession is not helping the dollar either, said Monica Fan, senior currency strategist at Bank of America.

Asian traders say the dollar got a short-covering boost against the yen in Tokyo trading after China said Taiwan President Chen Shui-bian’s backing of a referendum on formal independence would severely damage cross-strait relations and lead the island towards disaster.

The greenback also bounced three-quarters of a per cent against the Swiss franc to 1.4780 from 1.4674. Sterling slipped against the dollar and the euro after weaker-than-expected UK output data dashed hopes of a rate hike this year.—Reuters